ABR delivers positive Scoping Study update
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
American Pacific Borate and Lithium (ASX:ABR) advised the market on Thursday that the Scoping Study relating to its Fort Cady borate and lithium project located in Southern California was progressing quickly, and importantly, supported the potential for production of a lithium by-product.
The initial results are based on 33 historic drill holes, 17 production wells, pilot plant operations, metallurgical tests, laboratory derived data engineering studies and previous feasibility studies.
While this provides substantial data to work with, management emphasised that the information collated to date was based on low-level technical and economic assessments that are not sufficient to support the estimation of ore reserves.
However, flow sheet, mass balance, reagent consumption and operating cost estimates suggest the production of a high purity boric acid is achievable.
However it is the early stages of this company’s development, so if considering this stock for your portfolio you should take all public information into account and seek professional financial advice.
Preliminary C1 operating cost (direct costs including expenses incurred in mining and processing) estimates are viewed by management as encouraging. The addition of lithium by-product credits should enhance the financial metrics of the project.
Based on yet to be validated metrics, ABR’s Executive Director, Anthony Hall said that the likely EBITDA margin was around US$500 per tonne, which would in turn deliver an EBITDA payback of less than two years.
Underpinning these assumptions were operating expenditure estimates of between US$345 and US$383 per tonne. In terms of the commodity price, Hall noted that boric acid prices in North America were hovering between US$800 per tonne and US$1000 per tonne.
Lithium not factored into early estimates
ABR is due to release the maiden JORC Compliant Mineral Resource Estimate and Scoping Study in the fourth quarter of 2017.
The company’s early stage estimates suggest that funding in the order of US$80 million-US$90 million (phase 1) will be required for commercial scale operations.
Commenting on these developments, ABR’s Managing Director, Michael Schlumpberger said, “We are very excited with the initial results of our boric acid project scoping study work and we appear likely to deliver a study showing low, high margin and a proven commercial processing route”.
While Schlumpberger noted that the initial focus is on delivering a compelling boric acid operation, he believes there is a strong chance that the company can deliver real lithium carbonate upside that will enhance the project metrics.
General Information Only
This material has been prepared by StocksDigital. StocksDigital is an authorised representative (CAR 000433913) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573).
This material is general advice only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with personal financial or tax advice and does not take into account your personal objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, StocksDigital, their related body corporates or any other person do not accept any liability for any statement in this material.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
